March 10, 2011

China is expected to import a record 58 million tonnes of soy in 2011-12, as growing meat consumption continues to fuel demand while domestic plantings are expected to fall, the USDA's Beijing attache said.

The import volume for the new season is up 5.5% from an estimated 55 million tonnes this year, the USDA said in a report Wednesday (Mar 9).

Although a slowdown in import growth, falling to 9.3% this season compared with a 22% spike in 2009-10, the forecast would still mark a record level of imports, putting increased pressure on already tight world markets.

The attache forecasts soy imports from the US - its largest supplier with a 45% share - are expected to reach 27 million tonnes, or 992 million bushels, next season. It also raised the USDA's current estimate for US exports to China by one million tonnes for 2010-11 to 25 million tonnes.

"Soy imports will show steady growth in the foreseeable future because of the strong and growing demand for protein meals and vegetable oils," the USDA said, adding that "limited arable land and a preference for grain crops by farmers for better returns will continue to restrict domestic soy production growth."

Chinese soy production is expected to fall to 14.8 million tonnes in 2011-12, down from 15.2 million tonnes in the previous year due to a fall in acreage to 8.7 million hectares and poor yields of just over half of the US average of three tonnes a hectare.

Soy acreage is also expected to lose ground to cotton and corn in the Shandong, Henan and Hebei provinces this season, where farmers intend to raise cotton production by 4% in 2011-12.

Still, the attache said it does not think the government has any plans to lower import tariffs for soy and soyoil, currently at 3% and 9%. "Facing a growing supply and demand gap for oilseeds, the government of China is likely to maintain the current trade and industry development policy in 2011-12," it said.